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GPU, ASIC Suppliers See Dim Prospects for Crypto Mining

According to industry sources, the growth momentum of GPU and ASIC supply chain has slowed down in the past two months affected by the waning of crypto mining craze starting in April 2018. Despite the slight upturn in May, however, the market prospects for crypto mining have tended to be conservative.

Apart from that, Bitmain and Canaan, who dominate the crypto miner manufacturing market with 90% market share in total, are reportedly turning to artificial intelligence as an alternative source of revenue.

Suppliers of mining graphic cards (GPU) are plagued by increasingly high inventories, and players in the supply chain of mining ASICs are also suffering significant decreases in orders. It is estimated that the GPU industry will come back to be dominated by gaming demand in the second half year affected by the fading of crypto mining fever.

From April 2017 to March 2018, both ASIC-based Bitcoin mining machines and GPU-powered Litecoin and Ethereum mining devices all saw supply fall short of demand. This helped China’s leading Bitcoin miner supplier Bitmain squeeze into the top 10 clients of Taiwan Semiconductor Manufacturing Company (TSMC).

Nevertheless, the crypto mining heyday suffered an abrupt downturn in April due mainly to governments’ crackdown on crypto exchanges following exposures of scams, frauds and market manipulations, as well as incessant attacks on crypto exchanges.

Asus, Gigabyte and Micro-Star International (MSI) has seen sharp recession in their GPU demand; NVIDIA, which takes up more than 70 per cent of the world’s mining GPU market, has even said it will cut its quarterly revenues by 65 per cent, and AMD also predicted continuous fading of crypto mining in the second half.

As a result, Taiwan suppliers of graphic cards have seen their inventories pick up rapidly, and their sales prices have declined to the levels seen in early 2017. They may be forced to return to the gaming market to renew growth momentum in the second half of 2018, according to Digitimes.

On another front, ASIC supply chain players are also affected by the lackluster mining market. TSMC, for instance, has revised downward its estimate for 2018 revenues from fabricating mining ASICs for Bitmain, while ASIC designers Faraday Technology and Global Unichip, as well as IC packager Advanced Semiconductor Engineering (ASE) have also lowered revenue contributions from mining ASICs in the year.